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This chapter traces the interplay of innovation, technological change and economic growth in the context of the biophysical constraints that have, and always will, set the boundaries within which human society flourishes. Special attention is given to the complexities that pose challenges for understanding the role, and guiding the uses of technology. An illustration is provided for the case of energy transitions from non-renewable to renewable fuels. As the illustration highlights, institutional and societal innovations need to accompany innovations in technology to help ensure its deployment in ways that promote sustainability. Also, since sustainability inherently pertains to development paths that unfold over long periods of time in which environmental, social and technological conditions (re-)shape each other in unknown and unknowable ways, multiple criteria, rather than, for example, standard efficiency measures, need to be used to assess (anticipated) technology performance and to guide technology deployment. The chapter closes with a critical perspective on the legal and economic instruments that currently dominate conventional economic policies and the growth objective for which they are used.

This chapter provides an alternative basis for analysing economic growth and the consequent perpetuation of climate malaise. The contention herein is that the effectiveness of approaches based on standard neoclassical frameworks of production and factor utilization, regardless of their integration with scientific and related information, is likely to be constrained. This chapter considers a simple expansion of the standard depiction of production processes to illustrate that, even within the confines of traditional methods, mainstream recommendations to address climate change perpetuate rather than get to the root causes of the problem. Specifically, we integrate insights from the laws of thermodynamics and ecological resilience in a production function for macroeconomics to explicitly include the stock of environmental capital (KN) as an argument alongside manufactured capital (KM) and labour (L). Being distinct from the production functions that underlie the work of Nobel Prize-winning economists such as William Nordhaus and Paul Romer, whose work is firmly rooted in the notion that technological change and economic growth will solve the very problems they generate, our basic model yields quite different results. For example, extending the reformulated production function to the context of the Romer model suggests clear possibilities of the need for de-growth in selected economies. Furthermore, the Nordhausian claims of “optimal pollution” and “optimal climate change” could constitute a contraindication. If the term “optimality” must be used at all, then the optimal quantity is zero pollution, which is physically impossible, and zero climate change – which for biogeophysical reasons will not happen either.